Peru President Ollanta Humala has proposed a new tax stability contract with mining companies, where the taxation rates will remain unchanged for 15 years on investments of at least $500m.
The proposal is part of a package that Humala has sent for approval to the Peruvian Congress to facilitate investment in the Andean region.
The country’s economy, which has been consistently growing at 6%, posted a 4% growth in the first four months of this year, reported Reuters.
Mining contributes 15% to Peru’s GDP and forms 60% of its total exports; the country mainly exports copper, gold and silver.
Humala’s proposal also included expanding the existing tax stability contracts to cover additional investments, enhancing efforts to reduce red tape, improving transparency and relaxing environmental regulations.
Peru Prime Minister Helbert René Cornejo Diaz is reportedly hopeful that Congress will approve the measures quickly.
National Association of Business Organisations director Jose Miguel Morales was quoted by Reuters as saying that global mining companies rolling out big projects in Peru in the coming years, such as Southern Copper, MMG and Newmont Mining, would likely benefit under the new tax stability system.
"It’s a good legislative proposal that will promote investments," Morales said.
According to data released by the energy and mines ministry, Peru has an investment pipeline of more than $60bn in the mining industry.